Changes in Export Controls on Critical Minerals and Battery Materials: How Should Dual-Sourcing Strategies Be Restructured?

July 06, 2026

Elena Duan

Summary

Supply risks involving critical minerals and battery materials are expanding beyond price, production capacity, and transportation to include item classification, export licensing, end-use reviews, origin traceability, and uncertainty caused by the suspension or reinstatement of policy measures.

As of July 2026, certain natural flake graphite products and related articles remain subject to export controls. Export control measures announced in 2025 for lithium batteries, cathode materials, and synthetic graphite anode materials have been suspended until November 10, 2026. Meanwhile, the G7 is promoting the diversification of critical mineral supply sources and plans to establish more systematic supply chain traceability mechanisms, beginning with lithium and nickel.

Against this background, battery chemical procurement cannot be strengthened simply by adding another backup supplier. It is more important to confirm whether the two supply routes are genuinely independent in terms of raw materials, processing, export entities, logistics, and project qualification, and whether the second source can enter actual production when a supply disruption occurs.

Key Conclusions

A genuinely independent dual-sourcing arrangement means that two suppliers have completed the necessary qualification processes, do not share the same single points of dependency in critical raw materials, processing plants, export entities, logistics routes, or project approvals, and can enter production within a predefined switching period.

Under changing export control conditions, dual-sourcing strategies require three adjustments:

Shift from counting suppliers to assessing the independence of supply routes;
Shift from obtaining samples to completing commercial-batch and production-switching validation;
Shift from fixed procurement lead times to an integrated switching timeline covering production, licensing, logistics, and customer approval.

What Changes Have Occurred in Export Controls on Battery Materials?

Recent policy developments show that export risk is not defined by a permanently fixed list of materials. Items may be added, further specified, suspended, or adjusted again, requiring companies to continue assessing individual products according to their specific parameters and the policies in force at the time.

Time	Policy Change	Scope	Practical Significance for the Battery Supply Chain
December 2023	Adjusted export controls on graphite items took effect	Certain natural flake graphite products and related articles, including spherical graphite and expanded graphite, as well as synthetic graphite materials and articles meeting specified purity, strength, and density requirements	Some natural graphite products related to battery anodes require advance item identification and export licensing assessment
April 2025	Certain medium and heavy rare-earth-related items were placed under export controls	Metals, alloys, compounds, and certain permanent magnet materials related to samarium, gadolinium, terbium, dysprosium, lutetium, scandium, and yttrium	The impact is more direct on EV permanent magnet motors, selected equipment, and supporting industries, and should not be treated as equivalent to restrictions on cell chemicals
October 2025	Export control measures were announced for lithium batteries, cathode materials, and synthetic graphite anode materials	Certain high-energy-density lithium-ion batteries, lithium iron phosphate materials meeting specified parameters, selected ternary precursors, synthetic graphite anode materials, and related equipment and technologies	Once implemented, item classification, supplier switching, and licensing lead times would directly enter battery material procurement planning
November 2025	The newly announced 2025 measures were suspended	Measures including Announcement No. 58 of 2025 were suspended until November 10, 2026	A current suspension does not mean permanent cancellation; compliance and second-source preparations are still required
June 2026	The G7 issued a critical minerals supply chain statement	Rare earths, permanent magnets, and other critical minerals, with lithium and nickel selected as the first traceability pilots	Procurement evaluations will place greater emphasis on origin, processing location, supply transparency, and source diversification

Graphite export controls cannot be determined solely from product names such as “graphite” or “battery-grade graphite.” The current requirements involve specific product forms and technical conditions. For example, synthetic graphite materials and related articles fall within the relevant control scope when they simultaneously have a purity above 99.9%, flexural strength above 30 MPa, and density above 1.73 g/cm³. Synthetic graphite powder that does not have a flexural strength specification does not automatically fall within this technical category merely because it has a similar product name. Natural flake graphite products and related articles include products such as spherical graphite that are relevant to battery anodes.

Announcement No. 58 of 2025 was originally intended to place synthetic graphite anode materials, certain cathode materials, lithium-ion batteries, and related production equipment and technologies under new export controls. However, the announcement is currently suspended until November 10, 2026. Procurement planning should neither treat the measures as already fully implemented nor assume that the current status will necessarily remain unchanged after the suspension period ends.

Why Do These Changes Affect Battery Chemical Procurement?

The core risk in critical mineral supply is not limited to whether resources exist. It also concerns whether those resources can be refined, purified, converted into battery materials, and delivered across borders.

According to the International Energy Agency, the average market share of the three largest refining countries for key energy minerals, including copper, lithium, nickel, cobalt, graphite, and rare earths, increased from approximately 82% in 2020 to 86% in 2024. During the same period, around 90% of refined supply growth came from the single largest supplier country.

When processing capacity is highly concentrated, actual supply disruptions may still occur even if total global production has not declined significantly. Possible causes include:

Products need to be reassessed to determine whether they fall within controlled item categories;
Exporters need to provide additional end-user and end-use documentation;
Export license applications take longer than planned procurement timelines;
Raw materials are available, but battery-grade purification or modification capacity is insufficient;
Two suppliers depend on the same upstream producer or export entity;
Materials can be delivered but have not passed production-line validation or customer change approval;
The suspension, reinstatement, or adjustment of policies changes contractual responsibilities.

Therefore, whether a second supplier can provide a quotation is not the most important question. The more important issue is whether the second source can genuinely replace the existing supply under compliant, quality-controlled, process-compatible, and deliverable conditions.

Which Materials Are Directly Affected, and Which Represent Indirect Risks?

Not all critical minerals affect the battery value chain in the same way.

Material or Product Category	Type of Impact	Current Risks Requiring Attention	Dual-Sourcing Priority
Natural flake graphite, spherical graphite, and related articles	Directly enter certain anode material supply chains	Item classification, export licensing, end-use documentation, and concentrated purification capacity	Confirm mine source, spheroidization and purification plants, surface treatment, and export entity
Synthetic graphite anode materials	Directly affect anode capacity, first-cycle efficiency, cycle life, and fast-charging performance	The additional measures announced in 2025 are currently suspended, creating uncertainty about policy status after the suspension period	Prequalify different graphitization and coating routes and maintain switchable sources
Lithium iron phosphate and ternary precursors	Directly affect cathode systems	Some additional control measures are currently suspended; different sources may vary in compaction, morphology, and impurity profiles	Distinguish between second sources for finished materials and second sources for base metal salts
Lithium salts, nickel salts, and other battery chemicals	May not be directly covered by the same export controls, but their processing and supply sources may be highly concentrated	Origin traceability, refining concentration, trade policy, and project delivery risks	Trace raw material sources, conversion plants, and long-term supply routes
Electrolyte salts, solvents, and functional additives	Directly affect interphase formation, cycling, rate capability, and low-temperature performance	Concentrated high-purity processing capacity, upstream intermediates, and formulation compatibility	The second source must complete electrolyte and full-cell validation
Medium and heavy rare earths and permanent magnet materials	Generally do not directly form the cathode, anode, or electrolyte of mainstream lithium-ion batteries	More directly affect drive motors, equipment components, and supporting manufacturing	Establish separate supply contingency plans for motors and equipment rather than combining them with cell materials

The medium and heavy rare-earth controls implemented in April 2025 cover specified metals, alloys, oxides, compounds, and certain permanent magnet materials. However, further processed electronic components such as motors do not automatically fall within the same item scope. Rare-earth risks are more appropriately included in the management of vehicle motors, manufacturing equipment, and supporting supply chains rather than being directly classified as risks affecting all battery chemical procurement.

What Constitutes a Genuinely Independent Dual-Sourcing Arrangement?

Two different company names do not necessarily represent two independent supply chains.

Two distributors may purchase from the same manufacturer. Two material producers may use the same purification plant, or they may both depend on the same export agent, warehouse, or port. If that shared point is disrupted, both suppliers may lose their ability to deliver at the same time.

Dual-Supplier Independence Assessment Matrix

Assessment Level	Questions to Confirm	Common Signs of “False Independence”	Recommended Supporting Evidence
Raw material source	Do the two suppliers use different mines, base chemicals, or precursors?	Neither supplier can disclose second-tier upstream sources; raw material origins and batch characteristics are identical	Country-of-origin information, upstream declarations, and purchasing or processing route descriptions
Material processing	Are refining, purification, spheroidization, graphitization, coating, or synthesis performed at different plants?	Company names differ, but production addresses, test report formats, or process characteristics are the same	Production sites, process flows, contract manufacturing information, and change notification procedures
Export compliance	Do the suppliers rely on different export entities, license applicants, or trading agents?	Orders from both suppliers are ultimately declared for export by the same company	Export entity details, item classification statements, licensing responsibilities, and end-use requirements
Logistics and delivery	Are different warehouses, ports, transportation routes, or regional inventories available?	Both suppliers ship from the same bonded warehouse or port	Inventory locations, alternative ports, transport routes, and emergency delivery plans
Technical validation	Have both materials completed formulation, production-line, and commercial-batch validation?	The second supplier has provided only a laboratory sample or a single test report	Test records, pilot production records, multi-batch data, and project approvals
Commercial availability	Can the second source accept orders and complete delivery within the agreed period?	Only long-term quotations are available, without actual orders, capacity confirmation, or delivery commitments	Recent order records, minimum order quantities, capacity windows, and contract terms

The purpose of dual-supplier assessment is to identify single points shared by both supply routes. The more shared nodes there are, the less risk diversification the second supplier actually provides.

Why Must the Second Supplier Enter the Real Production System?

Many backup suppliers have already submitted samples and specifications but have not completed production-line qualification. Such suppliers should be treated as potential sources rather than switchable sources.

Switching time is not the time required for a supplier to confirm that inventory is available. It is the total time from activating the second source to completing material release, production use, and any necessary customer approvals.

Four Stages of Second-Source Validation

Validation Stage	Questions to Resolve	Practical Risk if Incomplete
Item and supply route confirmation	Is the product a controlled item? Are the raw material, processing, export, and logistics routes clear?	The material meets specification but cannot be exported or delivered as planned
Laboratory and application validation	Will differences in key parameters affect formulation, dispersion, sintering, or interfacial reactions?	Routine testing passes, but system performance is inconsistent
Small-batch production validation	Can the material fit existing equipment, process windows, and quality control methods?	Scale-up causes coating, filtration, settling, compaction, or yield problems
Commercial-batch and project approval	Are multi-batch variations controlled, and does the customer permit the change?	Emergency switching still requires renewed review or customer confirmation

Even after a second supplier completes one laboratory evaluation, companies still need to monitor whether production sites, upstream sources, process equipment, and key raw materials have changed. A backup source that has not received real orders for a long period should also be reassessed to confirm that the current product still matches the historical sample.

Which Parameters Should Be Validated When Switching High-Risk Materials?

Second-source validation should not simply replicate a general-purpose battery chemical testing checklist. It should be designed around the specific function of the material within the battery system.

Material Category	Parameters Requiring Priority Comparison During Switching	Potential Impact of Parameter Changes
Graphite anode materials	Particle size distribution, particle morphology, specific surface area, compacted density, surface coating, and first-cycle efficiency	Changes in slurry viscosity, coating condition, calendering window, first-cycle capacity loss, and cycling performance
Lithium iron phosphate or ternary precursors	Particle morphology, particle size, tap density, metal ratio, and critical impurities	Effects on mixing, sintering, compaction, capacity, rate capability, and batch stability
Lithium salts and electrolyte salts	Assay, moisture, free acid, metal impurities, anionic impurities, and insoluble matter	Effects on electrolyte stability, cathode processing, interphase formation, and gas generation
Electrolyte additives	Assay, key by-products, residual solvents, thermal stability, and formulation compatibility	Changes in interphase formation, cycle life, high- and low-temperature performance, and storage stability
Conductive additives and binders	Structure, particle size or molecular weight distribution, surface properties, and dispersion behavior	Effects on conductive network formation, slurry stability, electrode strength, and equipment process windows

The same chemical name, CAS number, or similar assay can only indicate that the material identity or basic properties are comparable. It does not prove that the material can be directly substituted in an existing battery system.

How Should Dual Suppliers Be Configured According to Risk?

Applying the same dual-supplier requirements to every material creates a large amount of low-value review work and may still overlook materials that are genuinely difficult to replace.

A more practical approach is to assess four factors together:

Concentration of supply sources;
Sensitivity to export control policies;
Impact of material switching on process and performance;
Time required to complete customer or project approval.

Material Risk Classification

Risk Level	Typical Situation	Required Status of the Second Source
High risk	Key anode, cathode, or electrolyte materials that are explicitly controlled, close to control thresholds, or highly concentrated in origin and processing	Complete commercial-batch, production-line, and required customer validation, while maintaining real purchasing records
Medium risk	Materials not directly controlled but whose switching would significantly change process windows or cell performance	Complete at least small-batch production validation and establish a clear scale-up plan
General risk	Auxiliary materials with diversified sources, low switching difficulty, and limited impact on core performance	Complete document review, basic testing, and use confirmation, while maintaining an approved supplier list

A second supplier for a high-risk material does not necessarily need to receive the same purchasing share as the primary supplier. However, its real supply capability should be maintained through periodic orders. A second source without recent production and delivery records is unlikely to assume volume supply immediately during an emergency.

How Should Export Licensing Be Incorporated into Lead Time and Contract Management?

Traditional procurement lead times usually include production scheduling, testing, packaging, and transportation. Controlled items may also require additional time for:

Confirmation of item technical parameters;
Determination of export control classification;
Preparation of end-user and end-use documentation;
License application and supplemental documentation;
Verification of license scope;
Customs declaration and customs review;
Adjustment of logistics routes;
Internal or customer change approval.

An export license should not be interpreted simply as an export prohibition, but licensing requirements increase lead-time uncertainty. For relevant graphite items, application documents may include technical product descriptions, test reports, end-user statements, and end-use certificates. The stated end use must be specific and accurate.

Procurement contracts need to clarify:

Whether the product falls within or is close to a controlled item category;
Which party is responsible for item classification;
Which party provides end-user and end-use documentation;
Whether lead time begins upon order confirmation, license approval, or goods release;
How unfulfilled orders will be handled if policies are suspended, reinstated, or adjusted;
Whether suppliers must provide advance notice before changing mines, processing plants, or export entities;
Whether alternative sources are available if a license is not approved or approval is delayed.

Compliance assessments should be based on actual product parameters, destination, end user, and the export control requirements in force at the time. They cannot rely solely on customs codes, product names, or verbal statements from suppliers.

Where Do Current Dual-Sourcing Strategies Most Commonly Fail?

Common Problem	Root Cause	Possible Result
Two suppliers rely on the same upstream source	Only first-tier suppliers are reviewed, without tracing raw material and processing sources	Both suppliers lose supply capability when the upstream source is disrupted
The second supplier remains at the sample stage	Production-line and commercial-batch validation have not been completed	Emergency switching still requires new testing
Only assay or purity is compared	Morphology, surface properties, impurity profiles, and process differences are ignored	Testing passes, but battery performance or production yield declines
Current measures and suspended measures are not distinguished	Policy status is not fully understood	Inventory and procurement plans either overreact or remain insufficiently prepared
Licensing time is not included in lead time	Contracts consider only production and transport	Orders are completed but cannot be exported as planned
The backup source has had no real orders for a long period	Production lines, raw materials, and processes have changed	Historical validation results are no longer representative
No notification mechanism exists for supply route changes	Changes in mines, plants, or export entities are not identified	Previous qualification and compliance conclusions are no longer valid

What Should Be Completed Before November 10, 2026?

Announcement No. 58 of 2025 is currently suspended until November 10, 2026. After the suspension period, the relevant measures may be reinstated, remain suspended, or be adjusted again. Supply chain preparation should therefore not wait until a new policy decision is announced.

Short Term: Identify Policy and Supply Exposure

The first priorities are to:

Establish a product list covering graphite, cathode materials, precursors, and critical battery materials;
Distinguish between currently effective measures, suspended measures, and requirements that represent policy trends only;
Record product forms, critical technical parameters, and export entities;
Trace second-tier upstream sources for both primary and secondary suppliers;
Confirm whether the two supply routes share plants, agents, or ports;
Recalculate the actual switching time for high-risk materials.

Medium Term: Complete Second-Source Validation

Before the policy status becomes clearer, companies can prioritize:

Multi-batch sample validation from the second supplier;
Small-batch production-line testing;
Assessment of how material differences affect formulation and process windows;
Preparation for customer change or project approval;
Periodic small orders to keep the source commercially active;
Contract clauses covering policy changes and supply route change notifications.

Long Term: Preserve Material Compatibility Windows During Product Development

If a formulation and process can only accommodate a specific particle size, surface treatment, or impurity distribution from one supplier, switching may remain difficult even after a second supplier has been identified.

Validating two acceptable material windows during the development of new materials and new cells can reduce the cost of redesigning formulations, adjusting equipment, or repeating customer qualification later.

The G7 has proposed starting critical mineral traceability pilots with lithium and nickel and gradually expanding them to other minerals. This means that origin, processing location, and supply transparency may become increasingly important in procurement evaluation systems.

What Information Should Be Included in an RFQ for a Second Supply Source?

ChemicalCell can support the organization of target specifications, sample conditions, packaging requirements, and supply information for battery chemicals, fine chemicals, and custom intermediates. Whether a material can enter actual production still needs to be determined based on the specific formulation, equipment conditions, and validation results.

When evaluating a second source, an RFQ may include:

Product name, grade, or CAS number;
Specific battery system and material function;
Current material specification or reference sample;
Parameters that must remain consistent;
Identified process or performance sensitivities;
Sample quantity, small-batch quantity, and estimated annual volume;
Target country or region of delivery;
Expected supply switching timeline;
Requirements for country of origin, production site, or processing route;
Whether different upstream or export routes are required;
Whether customer change approval is involved;
Required testing, traceability, and compliance documents.

Clearly describing the current material, acceptable differences, and switching conditions is more useful for evaluating the feasibility of a second source than providing only the product name and purity requirement.

FAQ

Have the Export Controls Announced in 2025 for Lithium Batteries and Synthetic Graphite Anode Materials Already Taken Effect?

As of July 2026, Announcement No. 58 of 2025 issued by the Ministry of Commerce and the General Administration of Customs remains suspended until November 10, 2026. The announcement covers certain lithium-ion batteries, cathode materials, synthetic graphite anode materials, and related equipment and technologies. Its status after the suspension period should be determined according to the official documents in force at that time.

Do All Battery-Grade Graphite Exports Require an Export License?

No. The determination depends on product form, composition, performance parameters, and the export control list in force at the time. Natural flake graphite and some related articles fall within the relevant scope. Certain synthetic graphite materials must simultaneously meet specified purity, strength, and density requirements. Synthetic graphite powder does not automatically fall within the same technical category simply because its product name includes “synthetic graphite.”

Why Can Single-Source Risk Still Exist When Two Suppliers Are Available?

Two suppliers may use the same mine, purification plant, graphitization plant, export agent, or logistics node. Dual sourcing can effectively diversify supply disruption risk only when the critical raw material, processing, export, logistics, and project approval routes do not share the same single points of dependency.

Can Safety Stock Replace a Second Supplier?

Not entirely. Safety stock mainly absorbs short-term delays and cannot solve long-term policy changes, upstream shutdowns, or regional supply disruptions. For battery materials requiring long qualification cycles, inventory, second-source development, and process compatibility usually need to be planned together.

Conclusion

Changes in export policies for critical minerals and battery materials do not mean that all materials will immediately stop being supplied, nor do they mean that suspended measures can be ignored indefinitely.

Battery chemical dual-sourcing strategies need to shift from supplier list management to supply route and switching capability management:

The two suppliers need sufficiently independent raw material, processing, export, and logistics routes;
The second source needs to complete application and production validation appropriate to the material’s function;
Licensing, policy changes, and customer approval timelines need to be included in the lead-time model;
High-risk materials need real orders to maintain backup supply capability.

Only when the second supplier can complete compliant delivery and enter actual production within a defined period can a dual-sourcing strategy genuinely reduce the impact of critical material supply changes on R&D, production, and customer delivery.